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Wednesday, March 22, 2023

The Fed will investigate how the supervision was before the bankruptcy of Silicon Valley Bank

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“Developments surrounding Silicon Valley Bank require in-depth, transparent, and prompt analysis by the Federal Reserve”declared the president of the organization, Jerome Powell, in a statement.

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The results of the report will be published on May 1.

“We must proceed to take a long and hard look at how we supervise and regulate this company, and what we should learn from this experience,” said Michael Barr, Fed vice chair in charge of banking regulation.

The Fed is the body in charge of inspecting and examining some financial institutions.

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Barr was one of the principal architects of the Dodd–Frank lawvoted in the aftermath of the 2008-2009 financial crisis to better regulate the activity of large US banking institutions.

Former President Donald Trump relaxed these regulations in 2018.

A wave of withdrawals led to the bankruptcy of three banks last week, including SVB, which could not respond to its customers and was shut down by authorities on Friday.

Source: Ambito

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